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Sixth Street Specialty Lending, Inc. (TSLX)

Company Dividend Discount ModelIndustry: Asset ManagementSector: Financial Services

Valuation Snapshot

Stable Growth$47.86 - $126.95$73.18
Multi-Stage$35.09 - $38.21$36.62
Blended Fair Value$54.90
Current Price$22.86
Upside140.15%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.66%11.16%1.581.461.440.911.391.041.021.010.860.83
YoY Growth--8.38%1.46%57.36%-34.19%33.03%2.24%1.28%17.94%2.85%51.39%
Dividend Yield--7.07%6.90%7.86%3.93%6.61%7.50%5.07%5.65%4.19%5.15%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)191.55
(-) Cash Dividends Paid (M)163.32
(=) Cash Retained (M)28.23
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)38.3123.9414.37
Cash Retained (M)28.2328.2328.23
(-) Cash Required (M)-38.31-23.94-14.37
(=) Excess Retained (M)-10.084.2913.87
(/) Shares Outstanding (M)93.8993.8993.89
(=) Excess Retained per Share-0.110.050.15
LTM Dividend per Share1.741.741.74
(+) Excess Retained per Share-0.110.050.15
(=) Adjusted Dividend1.631.791.89
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$47.86$73.18$126.95
Upside / Downside109.35%220.12%455.36%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)191.55204.00217.26231.38246.42262.44270.31
Payout Ratio85.26%86.21%87.16%88.10%89.05%90.00%92.50%
Projected Dividends (M)163.32175.87189.36203.86219.44236.19250.04

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)159.69161.20162.71
Year 2 PV (M)156.12159.09162.09
Year 3 PV (M)152.61156.99161.46
Year 4 PV (M)149.16154.90160.80
Year 5 PV (M)145.78152.82160.13
PV of Terminal Value (M)2,530.752,652.992,779.90
Equity Value (M)3,294.113,437.993,587.10
Shares Outstanding (M)93.8993.8993.89
Fair Value$35.09$36.62$38.21
Upside / Downside53.48%60.19%67.13%

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